Why do some parents choose savings over helping adult children?

[Perthgirl]

My Mum is a 86 year old widow has just received a HMRC self-assessment to complete. My father died 3 years ago and all of their ‘joint’ money became her money. She didn't want to pay an accountant to help with her self-assessment and asked me to help.
I have mentioned previously that she would need to complete a self-assessment but this fell on deaf ears as ‘no-one has asked me for it’.
She lives in a £700k very nice house and manages well on her own. She is fit, well and active.
We get on well and I think I am a very loving and supportive daughter. I have never received any financial support from my parents since leaving home at 19.
It transpires that she has over £500,000 in ISAs, Premium Bonds, numerous building society savings accounts. All building society accounts have the £85k IFA protected amount/limit.
My husband and I are 59 and 60, both work full time and have 3 children (triplets) in final year of university. When I did a rough calculation on what £££ she might owe, her comment was oh ‘I might not be able to afford to give the children their £50 Christmas money this year, as I will have a large tax bill’.
It is her money and she is entitled to do what she pleases, etc. She enjoys a very comfortable life, with 3 overseas holiday each year and a busy social life.
She has previously said that she has so much money coming in that she does not know what to do with it. My Dad had a very good state funded pension which she still receives. When I suggested that she might like to help the grandchildren through Uni, she said, well no, as I do not know when I might need the money for myself!
Why would some parents/grandparents choose to pay £1000s to the tax man rather than possibly help the family?
I realise that she may need to fund a care home at some later stage, but £700k + £500k = £1.2M.
Can anyone help me understand?

Ditto. I get the ‘it’s her money’, but I couldn’t have watched my grandchildren go to uni without offering some support. I’d like to think in this instance it’s because she is not well educated on financial matters and therefore feels insecure about what she may need going forward, but unless she is planning to live in a state care home for the next 20 years she has more than enough to have helped.

She can do what she wants with her money and may be worried about future needs. If she gives handouts now then needs more money later on than she has, she can’t guarantee anyone will be able or willing to give that to her, so she is holding onto what she has.

It is however very early in the year to announce you won’t be giving grandchildren Christmas presents. That seems very miserly. If she really didn’t have enough money, she could buy them something cheaper instead of giving them money.

Asking you to do her taxes instead of an accountant may be not just about money but a trust issue, especially if she’s never used an accountant before. She might be afraid that she gets someone who scams her.

I would be tempted given the comment about Christmas presents, which just seems unnecessary and mean, to tell her time is money and you don’t have time to do her taxes.

She doesn’t have 1.2 liquid, 700k is her house that she lives in. She has 500k actually… I don’t like that you’re saying she should give your kids money to avoid taxes. If everyone did that this country would be even more bankrupt..

and yes ageee with all previous posters who say that as people age they feel more vulnerable, it’s hard to forecast what sort of medical care or living assistance she might need in future

I get really tired of these sorts of explanations. Yes, its their money but its funny people excuse them as not really knowing how much they have but in the same breath they never seem to have an issue in getting (often daughters or even DIL's) to do do all sorts of things they cannot be bothered to pay for.

The war generation is a very poor excuse these days

As I said I met plenty who had done low paid work, lived in social housing, didn't retire with private pensions. They were probably the people you did not notice doing rubbish jobs. People who were disabled before DLA was a thing and just about got by. I'll leave it there.

My DF was similar and when he died recently we ended up with an IHT bill that was more than my DCs student loans. However, I never had to support him financially and he left his affairs in good order, so his estate was easy to deal with.

I never got handouts - nor expected any from him - but now I’ve inherited there is a sense of expectation that I’m going to be paying for everything family wise from now on, as well as using up my gift allowance every year. I probably will do this but I do resent the sense of entitlement which is also being felt by my DSis from her DCs. We’ve both been very generous with will variations so far, but neither of us want to be seen as the family cashpoints.

I’m fortunate to now be comfortable and will help my family, but not on demand nor to the detriment of my own financial wellbeing now or in the future.

If I get to that age with that much in a house and savings, I will be attempting to offload to my family as much as possible. She can always sell the house or do deferred payment for care if she needs it but it's not a given that you will need a care home or visitors in old age. I don't know anyone that has lived in a care home.

And they never ever helped you, even with 5000 or something ? Or few hundreds here and there?

there is a thread here about a lady who lives in an old house who she believes cost 800k and above and is never going to accept less than what she wants for it, never mind it really is good for gutting only....I understand the word miser now a bit better

I’d tell her straight ‘Blimey Mum, you need to start thinking about your future. At the moment, you’ll get clobbered with inheritance tax as your savings are huge. So I suppose you need to weigh up giving tens of thousands to Rachel Reeves if you pop your clogs next week or dishing some out to the grandchildren. 10 grand for each child will leave you with a whopping £470,000 for a rainy day. What d’you think? I’m not after any, but bloody hell, what you waiting for Mum? You have plenty to pay for your care, and that’s before selling your 700k house’.

i see your point

My dad was in a nursing home for six years, paying for it himself, which cost around £600k. That’s probably pretty high in her list of priorities.

I would get her In front of adviser because you are going to be stung for the IHT

And none of that changes the fact they still lived through the most welfare-focused period in the history of the country, with benefits, entitlements and prioritisation of needs by successive governments that we as a society had never seen before and will never see again. They were and are still net beneficiaries by a substantial amount. Why is that so difficult to accept?

She won’t pay the IHT though-she will be dead.

So she has £500k in savings and a state pension? And it sounds like that £500k is in investments rather than a pension wrapper.

It’s a slightly odd financial set up. Maybe that is what is what’s clouding your judgement.

Most people of that generation would have purchased an annuity. If she had done that, and had e.g. an income of £25k and £50k in savings, would OP still be so very pissed off and grabby? “Look mum, you don’t need a £25k income. Give £10k per year to the grandkids instead and you can live off the rest”.

As it is, the way she has structured her finances (intentionally or otherwise) means OP stands to inherit much more than otherwise.

My parents are the same. They have £1.4 m including the £700k house, plus 5 pensions coming in from different places including the 2 state pensions, but they will not part with any of the capital, despite knowing there'll be a £160k tax bill to pay if they don't. They are currently accruing more than they spend each month so god knows how much it will be in the end, if it doesn't all go on care home fees. I've even suggested that if they were to use some of that money to pay off our mortgage (around £100k) we could then give them our monthly mortgage payments or set it aside so they could have it back if they ever needed it and it wouldn't be subject to IHT, but they are adamant they need it all.

It is what it is. If/when my brother and I finally inherit it, hoping I'll be a quite advanced age myself and it will be in a very long time, I don't think I'll have any need of it- the mortgage will be long since paid off and my daughter will be all grown up. I'll probably just put it all into trusts for the grandchildren.

Because believe it or not, not everyone could buy a house for 5k that is now worth a million.Many, many people did not have pensions. Most people left school at 15 or 16 and worked in modestly paid jobs. Women left work to raise children so missed out on salaries and pensions. Lots of people never claimed a penny in welfare but were still broke.

It's mystifying to me, but in my MIL's case i think it's partly just that she's lost a grasp of what things cost and so she doesn't really understand the amount she has.

Various people (her brother, friends) have tried to gently suggest that it might be tax efficient to be gifting money now but she's very anxious about it.

She has equivalent of 4k a month in pension income, 300k in the bank, a house and lives in a country where she wouldn't have to spend her savings or sell her house for care.

My husband is in no need of any sort of financial gift, but it would really help out his brother and sister.

I've been financially independent since finishing university. My parents never offered me any money, nor did they ever move out of their large house. I know without question that they would have helped me financially if I had ever been in dire straits, as they were extremely generous people. But they fully supported one of my siblings who has ASD and they also (misguidedly, in my view) essentially supported the other sibling who is basically lazy and manipulative. They had enough on their plate, in my view.

But TBH I wouldn't have taken any money from them even if they had offered (unless, as above, I was in dire straits). I'm an adult, neither DH nor I earn a huge amount, but we have always worked full time in professional careers. We are doing fine and perfectly able to take care of our family's needs.

My parents both died in recent years, and I'm glad they had a few years of retirement that they could enjoy in the house they loved. Their house is worth a decent amount, though I don't expect ever to benefit from it (my siblings are still living there and probably won't ever move out). I couldn't care less about inheritance.

I think she won’t admit to herself that she only has a decade at most left probably

And no one contacted you to sort out things or ?

My previous point still stands. Those many, many people you reference still lived within a system that supported them from cradle to grave. And you think there are broke pensioners now? Just wait 20 years to see what conditions the next generation of pensioners will be living under. I doubt they will need to be concerned about whether or not they need an accountant for their million pound portfolios.

All these wealthy parents need to get advice from a financial advisor. The FA will advise on the best investments, how to reduce income tax, managing inheritance tax and how to manage potential care costs.

When some dies with an estate over the inheritance tax threshold, the estate executors have to pay a whopping 40% to HMRC on any estate over the threshold. They have six months to pay, irrespective of whether probate has been given. After six months interest starts to accrue.

Her savings won't go very far if she ends up in a Care Home costing £1500 - £2000 p.w.